after the subprime mortgage crisis, US interest rates sharply dropped to zero, and mainland Chinese companies just outside with a low interest rate environment, borrows a lot of dollar loans.
2013, when still in the appreciation of the Yuan period, dollar interest rates at a record low, with the double advantage of mainland Chinese enterprises can greatly reduce the cost of financing, borrow in dollars to invest in the mainland China market to earn a much higher borrowing costs are richly rewarded.
famous real estate companies China vanke, for example, 2013 vanke's first issued overseas dollar debt when the 5-year $ 800 million of bonds issued that year coupon at 2.625%. Vanke of the high dollar bond interest rates are not high? we need to reference another Chinese property companies until 2015 we know bond interest rates, can obtain further information. 2015 defaulted Kaisa's Hong Kong-listed mainland property enterprise in January 2013, 7-year $ 500 million bonds issued overseas coupon for 10.25%, and Kaisa 2015 years unable to pay interest on a debt default, makes this a real estate company instant fame.
time to borrow Renminbi loans to buy the dollar policy
in 2015, the dollar probably began to enter the interest rate hike cycle, Kaisa real estate debt default could presage the Yuan is still in deep rate cut cycle. Over the next few years, the economy of mainland China is probably at a low ebb, deposit and loan interest rates will continue to fall, and the Yuan-dollar exchange rate will not remain strong.
visionary entrepreneurs on the Mainland of China, as early as a few years ago, to borrow Renminbi loans, insurance companies in Hong Kong to buy higher-yielding dollar deposit insurance. Now Yuan one-year deposit rates are already as low as 1.5%, more than five-year Yuan lending rate is only 4.9%, and the Yuan-dollar exchange rate is high, so we should borrow Renminbi loans, to buy the safety of dollar-denominated assets.
due to the above factors, Chinese mainland entrepreneurs to a one-time payment (lump sum) dollar endowment policy demands more and more, insurance companies in Hong Kong also started in October 2015, accept premiums more than 4 million single premium insurance customers in the Mainland of the Hong Kong dollar, to brush the Chinese mainland China UnionPay card to pay us $ Office Premium. Entrepreneurs from the cross-border transfer in Hong Kong and in mainland China, will be able to legally circumvent the strict exchange control policy in mainland China, easily to the Mainland renminbi assets into higher-yielding dollar insurance company endowment policy for Hong Kong.
entrepreneur in Hong Kong and mainland China insurers bought the dollar policy will be the most secure personal and family assets, the outside world will never know the existence of this policy.